Durban:  South Africa has granted long-term leases to major oil companies, including BP and Vitol, at the Island View Precinct in Durban, ending years of uncertainty over short-term agreements that had threatened investment and fuel supply security.

Transport Minister Barbara Creecy announced that the lease agreements will extend for 25 years. The decision, made in response to requests from the Fuels Industry Association of South Africa, uses Section 79 of the National Ports Authority Act, allowing the minister to bypass standard procedures in the national interest.

The Island View Precinct, located within Durban's port on the east coast, serves as South Africa's main storage and supply hub, handling around 70 percent of the country’s fuel imports. The extended leases are expected to strengthen the security of supply and encourage further investment in the energy sector.

BP’s South African unit has been granted approval for Sapref Pty Ltd, a joint venture with Shell, which has managed fuel imports at the Island View marine terminal since 2022, after ceasing refinery operations and selling the plant to the state-owned Central Energy Fund.

Engen, in which Vitol is a majority shareholder, confirmed that the minister had agreed to certain conditions, though the details were not disclosed. The Fuels Industry Association anticipates that negotiations for the 25-year leases will commence soon with the Transnet National Ports Authority.

Industry analysts consider this move a critical step in stabilizing South Africa’s energy sector and ensuring a reliable fuel supply for the country.